But Rockwell Schnabel, who has headed the US mission to the EU since September 2001, said that he was optimistic about the EU’s future economic development.

He is returning to the private sector as a venture capitalist, based in Los Angeles and New York, and he said he would be investing his own and other people’s money in Europe.

Reform and integration of the EU’s capital markets had the potential to boost economic growth by 1% of gross domestic product (GDP). Structural reform could add as much as 2% of GDP, he said.

“That is an enormous potential that Europe needs to strive for,” he said.

Speaking after the EU-US summit in Washington (20 June), Schnabel said it had been the best of the four he had attended in his time as ambassador.

“The body language at the press conference, the relationship that you saw between President Bush and [Jean-Claude] Juncker and [José Manuel] Barroso and Javier Solana is in my judgement substantially better than it was,” he said.

“The recognition of the need to do things together has been radically improved.”

Reflecting on his experience in Brussels, Schnabel highlighted a change of approach in some sections of the Washington administration with “a tremendous increase” in contacts with the EU from the US Treasury and the Securities and Exchange Commission. Previously, he said, the US Treasury was “nowhere to be seen in dealing with the EU”.

The ambassador said he had been concerned when he took over in Brussels to raise the profile of the mission in the US.

“I felt that it was a priority to get the message across to Washington and American business about how important Brussels was,” he said.

In the run-up to the Iraq war, “the atmosphere was definitely tested”, he said, adding that “the underlying stabiliser during that time was the economic relationship”. The ambassador played down the significance of trade disputes such as those over genetically modified products and over subsidies to Airbus and Boeing.

Working with the staff at the mission, Schnabel has prepared a book to be published in August, entitled The Next Superpower? The rise of Europe and its challenge to the United States.

“The fact that Europe has an economy as large as ourselves brings enormous power around the world,” he said. But whether or not the EU would become a superpower was still uncertain and would need another five-ten years to discern, he said.

President Bush has yet to nominate a replacement for Schnabel. His choice would be subject to confirmation by the US Senate.